EKG,IncIs Considering a New Project That Will Require an Initial

question 24

Multiple Choice

EKG,Inc.is considering a new project that will require an initial cash investment of $398,000.The project will produce no cash flows for the first two years.The projected cash flows for years 3 through 7 are $79,000,$88,000,$102,000,$140,000,and $160,000,respectively.How long will it take the firm to recover its initial investment in this project?

• A)3.81 years
• B)3.98 years
• C)5.57years
• D)5.92 years
• E)The project never pays back.

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Definitions:

Neuroticism

A personality trait characterized by emotional instability, anxiety, moodiness, worry, and a tendency toward negative emotional states.

Extraversion

a personality trait that involves being outgoing, energetic, and sociable, and deriving energy from interactions with others.

Conscientiousness

A dimension of personality that involves being disciplined, organized, and responsible for one's actions.

Cluster A

A classification within the Diagnostic and Statistical Manual of Mental Disorders (DSM), referring to personality disorders characterized by odd, eccentric thinking or behavior; includes paranoid, schizoid, and schizotypal personality disorders.